Lately President Barack Obama has been out on the road trying to sell another gigantic stimulus package to the American people. The president’s view and conventional progressive wisdom on economics is predictably the same as it is for all other issues: If there’s a problem in society, the government can fix it. Also predictable is the fact that this conventional wisdom is incorrect.

Just as government cannot fix most societal problems, it is largely impotent when it comes to the economy. The government cannot create private sector jobs, no president or congress can. They can only put up barriers, which kill jobs, and take them down, allowing jobs to return to where they are needed.

The government or any individual cannot understand the complexities of our economy because consumers and producers make billions of decisions every day. For this reason, government actions have too many unintended consequences to have positive long-term effects.

In the 1960s and 1980s, Presidents John F. Kennedy and Ronald Reagan were faced with recessions and showed how government can get out of the way of the economy and let it fix itself. Both decided to cut taxes drastically and both saw far-reaching economic expansion. By cutting taxes, the government returns capital to the economy where it originates and allows individuals to spend it where it pleases and where it is most efficient.

By getting out of the way and taking down barriers, government allows the economy to expand freely and more rapidly than under any government program.

In contrast, George W. Bush and Obama have fallen short. Bush tried to combat the latest recession by handing out one-time rebates to the public. He also spent hundreds of billions of dollars of taxpayer money to save private corporations that acted recklessly. Similarly, Obama spent hundreds of billions more in ‘stimulus’ and bailing out more failing corporations.

Obama has also established or proposed thousands of regulations and signed legislation that has slowed economic growth and killed jobs. Together these two presidents spent trillions to save the American economy, yet unemployment is still high and economic growth is still low. The fact is when the government gets involved in the economy, it diverts capital through actions that may seem helpful to some but make it difficult for the economy to grow.

The notion that the government can swoop in and save us from today’s stagnant economy is a false one. The government cannot spend our way out of economic hardship, nor can it afford to. The market can bring our economy back and make it better than ever, but there must be freedom, not government intervention.

Patrick Mocete is senior political science and policy studies major. His column appears occasionally. He can be reached at pdmocete@syr.edu or on Twitter @patrickmocete.

 

Published on November 2, 2011 at 12:00 pm